If you had the option to become a millionaire overnight or slowly build your wealth, which would you choose? Most people would likely pick the option to get rich quickly through an avenue like winning the lottery or inheriting a windfall of money. Playing the long game for wealth requires a significant amount of time, hard work and patience, and many would rather skip over this portion and get to the good stuff.
Getting rich quickly comes with its fair share of misconceptions. Money expert Dave Ramsey debunked four of these myths on his website Ramsey Solutions and explained why you shouldn’t believe them.
1. Wealthy People Make Risky Investments
One of the most pervasive myths about getting rich quickly is you need to take risks to become wealthy. These risks are often meant to be big, like investing all of your money into a single stock.
Data shows this is clearly a myth. Ramsey Solutions’ The National Study of Millionaires survey revealed eight out of 10 millionaires said the key to their financial success was through investing in their employer’s 401(k) plan. Three in four millionaires surveyed by Ramsey Solutions invested outside of company retirement plans, but none of the millionaires surveyed said they put their money into single stock or other, equally risky investments.
2. Wealthy People Take Dumb Risks To Make Their Money
Over the last few years especially, many have bought into the idea that hopping on a trending money bandwagon can make you rich fast.
One of the best examples has been cryptocurrency. If everyone is suddenly making money from digital currency like dogecoin and there are commercials starring celebrities advocating for buying bitcoin, should you follow their lead with your investments?
Not at all. A separate post on Ramsey Solutions reads that the issues surrounding cryptocurrency, like an unproven rate of return, make it a poor investment. The reality of putting a lot of money into a flash in the pan money trend is you’re likely to lose it, not build sustaining wealth off it.
3. Wealthy People Have High-Paying Jobs
This is an interesting myth, because it’s not unusual to assume someone who is rich has a good job and salary. We tend to imagine wealthy people holding job titles like CEO or VP and earning upwards of seven figures annually.
However, according to the National Study of Millionaires, the top five careers for millionaires are:
- Accountant (CPA)
Only 15% of millionaires surveyed by Ramsey Solutions said they held senior leadership positions. A whopping 93% of millionaires said it was their hard work, not a big salary, that contributed to building their wealth.
4. Wealthy People Inherit Their Money
If we don’t instantly think wealthy people got to where they are with an inflated salary or job title, the next train of thought is usually that they inherited their wealth.
Would you be surprised to find out this is also a myth? Because it is. Key findings from The National Study of Millionaires revealed 79% of U.S. millionaires didn’t receive any inheritance from their family.
When considering this percentage accounts for most millionaires, it means most millionaires are not born but rather made. And they reach their million-dollar milestone not by getting rich quick but by consistently investing, staying out of debt and making smart spending decisions.
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